STRIPE WILL USE NEW FUNDING TO BECOME THE BACKBONE OF PAYMENTS. News broke yesterday that Stripe raised $US80 million in Series C funding. Leading the round was PayPal Co-Founder Peter Thiel’s Founder’s Fund. Sequoia capital, Khosla, and Allen & Co. contributed as well.

The new funding brings the two-year-old online payments company’s total funding to over $US130 million.

Stripe’s goals are twofold. Similar to how Amazon Web Services is becoming the backbone of websites, Stripe wants to be the backbone of payments both online and for mobile devices around the globe. The company hopes to achieve this by focusing on the code behind e-commerce and mobile commerce rather than the financial aspects. In other words, Stripe aims to offer a product that is easy to adopt and use in addition to being developer friendly.

Stripe’s second goal, which is really more of a natural effect if they can accomplish their first goal, is to “increase the GDP of the Internet,” according to Co-Founder Patrick Collison. The company believes that its slicker payments system will lead to more sales for merchants — not a revolutionary idea, but a lofty tagline for sure.

Stripe’s strength is that it makes it really easy for startups to begin accepting payments. One of its weaknesses is that as these startups grow they may decide to make the switch to a payments provider that offers more in terms of reporting and analytics. The last thing a payments company wants is to lose customers just as those customers begin to grow their volume of payments. We think these are both reasons to believe that Stripe will get scooped up by one of the larger payments companies in the next few years in a move reminiscent of PayPal’s $US800 million acquisition of Braintree. Stripe’s valuation currently stands at $US1.75 billion. (TechCrunch)

SURPRISE, SURPRISE. GOOGLE IS LOOKING INTO ACCEPTING BITCOIN. Google is looking into how it should integrate Bitcoin into its payments system, according to Business Insider’s Jay Yarow via Forbes. The news broke after a marketing manager from Pakistan, Jarar Malik, posted to Reddit emails confirming the news. As far as we can tell, Malik was just a Bitcoin early adopter who wanted some answers and emailed a number of senior Google executives. He struck pay dirt with a response from Senior Vice President for Social for Google Vic Gundotra. (Business Insider)

Here is why it’s not surprising that Google is considering accepting Bitcoin:

Accepting Bitcoin as a method of payment is a low risk, low-cost move. Google could use a third-party, like Coinbase or Bitpay, to accept Bitcoin and change transactions into dollars instantly. This would virtually eliminate the company’s exposure to swings in the value of Bitcoin. Moreover, Bitcoin transactions processed by a third-party cost merchants about 1% of a transaction or less, so it lowers costs for Google. And anyway, the volume of Bitcoin transactions would be just a drop in Google’s ocean.

Google Ventures is already invested in a digital currency startup called OpenCoin.

STARBUCKS GIFT CARDS AND MOBILE PAYMENTS ACCOUNT FOR 30% OF ITS NORTH AMERICAN PAYMENTS. Drilling down further, Starbucks saw 5 million mobile app transactions a week in North America in the final quarter of 2013. This is an 11% increase from May 2013 when the company said the app drove 4.5 million transactions a week. The company also activated over 40 million new Starbucks gift cards in the final quarter of 2013, valued at over $US610 million dollars. While mobile wallet apps have suffered lackluster adoption in the U.S., Starbucks is an exception. Part of the company’s success is explained by its fiercely loyal customers. These customers visit Starbucks regularly so gift cards and mobile wallets make sense to use. (Payments Source)

GAUGING THE EXTENT OF FRAUD AT NEIMAN MARCUS. In a letter to customers, Neiman Marcus President and CEO Karen Katz wrote that 2,400 unique payment cards owned by Neiman Marcus customers had been used fraudulently since the company suffered a data breach spanning from July 2013 to October 2013. Katz went on to say that the breach could have affected as many as 1.1 million Neiman Marcus customers. (Neiman Marcus)

WELCOME, INSIDERS: The Payments Insights newsletter is now Payments Insider, a reflection of our increasing emphasis on the day’s most important topics in payments, as well as news exclusives of interest to industry insiders. We look forward to the newsletter becoming an even more important part of your morning routine. Don’t forget to sign up and get it every morning in your inbox. Please email [email protected] with news and tips.

ELECTRONICS RETAILER TIGERDIRECT IS NOW ACCEPTING BITCOIN. The company claimed that it is the first major retailer to accept Bitcoin. However, we think Overstock.com, which began accepting Bitcoin earlier this month, would contest that claim. TigerDirect is using Bitpay as its payments processor.(TigerDirect)

FISERV GAMIFIES ITS ELECTRONIC BILL PAYING PLATFORM. Only about 40% of people who bank online use their banks’ websites as a platform to pay bills. Payments provider Fiserv sees the low adoption of online bill paying as a market opportunity. The company says it’s adding features to its CheckFree RXP electronic bill payment platform based on gaming principles to see if it can get people to adopt paying bills online. The features Fiserv is adding are pretty basic — a progress bar, interactive tutorials, and advanced features that have to be “unlocked”as users become more knowledgeable about the service — so “gamification” might be a stretch, but the takeaway is that Fiserv is actively pursuing this market by improving the consumer experience. (Fiserv)

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